With Brexit talks in gridlock, British truckers plan for the worst

BIRMINGHAM, England (Reuters) - Transport company boss Chris Blackburn is contemplating spending almost a million pounds for a chance to keep his trucks on European roads if Britain leaves the EU without a deal in March.

Chris Blackburn operations director at Chambers and Cook Freight Ltd, poses for a photograph in Birmingham, Britain October 15, 2018. Photograph taken on October 15, 2018. REUTERS/Andrew Yates

Upgrading the emissions standards of his fleet would allow him to compete for the 984 annual European travel permits allocated for British trucks next year.

Competition will be fierce. Some 38,000 British trucks routinely drive in the EU and, if there is no Brexit deal, they will only be able to carry on with a permit. Britain’s EU membership meant they have never needed one before.

Even if Blackburn funds the upgrade, there is no guarantee the government will consider his business, moving industrial and construction equipment, important enough to give him permits.

Losing access would put a major strain on his 93-year-old family firm, Chambers & Cook, which has annual revenue of around 20 million pounds.

With barely five months to go, Britain has yet to agree exit terms and companies do not know how they will trade with the world’s largest trading bloc.

Blackburn’s predicament highlights the uncertainty of an industry which moves around 420 billion pounds ($547 billion) of goods between Britain and Europe each year to support manufacturers, retailers and even musicians.

“No or too few permits would be catastrophic,” the 53-year-old said at his Birmingham base, overlooking the M6 motorway.

“It is a gamble. It’s a massive cost.”

Many businesses are preparing for the worst, a no-deal where newly installed customs checks delay the movement of goods, leading to tailbacks and shattering cross-border supply chains.

For the haulage and freight industry that means applying for permits and international driving licenses, increasing warehouse space in Britain and Europe, ramping up customs capabilities and looking into European vehicle registration.

They are also trialing different ports in case Dover, Britain’s main gateway to Europe, becomes gridlocked, delaying the daily movement of up to 16,000 trucks.

Under government plans, two motorways and an airport in the south of England will be used as car parks if needed.

“Every hour that a vehicle is standing costs 50 pounds because they’re not earning,” Richard Burnett, chief executive of the Road Haulage Association told Reuters. “Within weeks we would see haulage companies go out of business.”

The government says it is confident of securing a deal but that the industry should prepare to use permits. It will also seek new bilateral agreements as quickly as possible if needed.

JUGGLING RESOURCES

For Blackburn, the priority is to get his company into shape to win as many permits as possible, so he can then juggle his resources by, for instance, allowing a driver set for Europe to pick up a permit from one returning to the UK.

The annual ECMT permits are issued by the International Transport Forum each year for travel in 43 countries including Russia, Turkey, Albania and Armenia and EU member states.

The annual permits, only for trucks meeting Euro 6 emissions standards, have rarely been used by British trucks as they typically only travel in the EU. Britain will allocate them to hauliers based on goods and travel frequency.

Chambers & Cook sends up to 20 trucks into Europe a day, mostly through Dover but it also has operations in the north east port of Immingham.

While the vast majority of goods go via Dover’s fast roll-on, roll-off ships, Immingham and other ports offer unaccompanied trade, where loaded trailers are picked up around the country, dropped at the port and left to be loaded onto European-bound vessels.

The service is slower and limited in its capacity however, but the fact that hauliers used to fast trade are considering such options show the level of concern.

James Colson, overseeing Brexit planning for Yusen Logistics and its 2,000 UK staff, could use Portsmouth and Poole on the south coast for France and the Iberian peninsula, or Harwich, Hull, and Newcastle for northern Europe and Scandinavia.

Only 60 of Transam’s 150 trucks are Euro 6 emissions standard so this would also limit permit use. The value of the goods they move, and the tight timeframes required, mean they could not do unaccompanied shipping.

David Rogers and his family-owned EM Rogers moves cars all over Europe for testing. He hopes they would be a priority due to Britain’s leading role in the global automotive chain, but nothing is clear. “It’s frightening,” he said. “There aren’t many people who can do what we’re doing”.

Rogers has a business in the Netherlands and could increase the number of trucks registered there, but that is not an option available to many.

The alarm comes at a difficult time for the industry, with many British firms saying they have struggled to compete against European companies with cheaper labor and diesel.

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Supporters of leaving the EU have always acknowledged it could cause short term disruption but say ultimately Britain will be freed of red tape and able to trade more widely. A survey of truck drivers taken before the 2016 referendum showed a majority backed Brexit.

Blackburn, talking next to photographs showing Chambers & Cook trucks from the 1960s and 1970s, said he could not understand why politicians were taking so long to agree a deal.

“They’ve had a lot of time and haven’t achieved anything,” he said. “As it’s looking like there’s a significant chance of no deal, our current plan is to assume that happens.”